Which of the following is correct?

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BlackTom AI · Accepted Answer

The question asks which statement among the options is correct about reporting frameworks. Rather than jumping to the answer, I will evaluate each choice in turn to uncover potential validity or misconceptions.
Option A: 'The Integrated Reporting (IR) framework focuses on 4 types of capital: financial, manufactured, natural and intellectual.' This description aligns with the core IR concept of reporting on multiple capitals, including financial, manufactured, natural, intellectual, human, social, and relationship capitals. However, the typical IR framework references a broader set of capitals beyond just four, so stating exactly four may be an oversimplification. Depending on the sourcing, some summaries highlight key capitals, but the canonical IR model uses more than four categories, which makes this statement potentially misleading or incomplete.
Option B: 'The Global Reporting Initiative (GRI) guidelines are presented in one part: reporting principles & standard disclosures.' In reality, GRI guidelines are organized into multiple components: the general disclosures, materiality, and standards for specific topics, plus sector-specific disclosures in some versions. Saying they are presented in one part oversimplifies the structure and is not accurate, as GRI comprises several modules and disclosures. This makes the statement incorrect or at least misleading.
Option C: 'The GRI framework is accepted by all as representing current “best practice”.' This is overly absolute. In sustainability reporting, various frameworks exist (GRI, SASB/ISSB, TCFD, etc.), and not all organizations or jurisdictions accept GRI as the sole or universally accepted best practice. Therefore, claiming universal acceptance is inaccurate and ignores debates and alternatives in practice.
Option D: 'An issue with the GRI framework is that companies can be selective about which indicators to report.' This statement correctly identifies a commonly discussed criticism of the GRI framework: organizations may choose to report only a subset of indicators, potentially leading to selective disclosure and biased or incomplete sustainability profiles. This is a known concern in practice and aligns with critiques of voluntary reporting frameworks that can be gamed via selective disclosure.
Collectively, Option D is the most accurate reflection of a legitimate issue associated with the GRI framework, whereas A, B, and C contain oversimplifications or absolutes that do not hold universally. The reasoning above explains why each option is correct or incorrect in turn, highlighting the conceptual nuances and common misconceptions about these reporting frameworks.

ACCT3563-Issues in Financial Reporting and Analysis - Term 3, 2025

Which of the following is correct?

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